Dáil Éireann díospóireacht -
Tuesday, 5 Feb 2002

Vol. 547 No. 3

Written Answers. - Insurance Industry.

Austin Deasy

Ceist:

112 Mr. Deasy asked the Tánaiste and Minister for Enterprise, Trade and Employment the action she intends to take to safeguard thousands of jobs in small industry whose viability is threatened by massive increases in insurance premia; and if she will make a statement on the matter. [3313/02]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I am very much aware of the substantial increases in insurance premiums that many firms are facing and of the problems this is creating for them.

The pricing and underwriting of insurance is, however, a matter for individual insurance companies. EU law prevents us from intervening in relation to the matter of premium levels or in respect of what risks that they are prepared to underwrite. Insurers make decisions on provision of cover based on their assessment of that particular risk.

The insurance industry has pointed to a number of factors, both domestic and international, to explain these increases. These include the high cost of settling claims, the general reduction in investment returns, recent court decisions regarding the calculation of compensation losses in personal injury cases and the effects of the 11 Sep tember attacks in the United States. The situation has not been helped by the failure of the UK authorised insurer, Independent Insurance Company Limited, which had a significant presence in the Irish market for the past seven years.

An interdepartmental implementation group is progressing the establishment of the personal injuries assessment board. I am confident that the establishment of the PIAB will achieve a reduction in the delivery costs of personal injury compensation, thus permitting a reduction in insurance costs to consumers.

A workplace safety group has also been established with a view to improving health and safety standards in the workplace. The objectives are to reduce workplace accidents, to encourage injured workers to return at the earliest possible date to the workplace and, to improve claims handling procedures, thus reducing insurance costs. The group is developing proposals at present designed to bring the initiative to small and medium sized firms.

I would encourage consumers and insurers to consider ways of reducing the worst effects of the current circumstances, for example by better management of risks, examination of excess covers and whether the full extent of the covers included in policies is actually required by each individual company.

Ivan Yates

Ceist:

113 Mr. Yates asked the Tánaiste and Minister for Enterprise, Trade and Employment the outcome to her exploration in conjunction with the Office of the Attorney General in the United Kingdom and the European Commission on the implications of the closure of a company (details supplied) for Irish policyholders; and if she will make a statement on the matter. [3405/02]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

Independent Insurance Company Limited is a UK authorised insurer. Accordingly, responsibility for ensuring that IICL could meet claims from its policyholders lay with the UK authorities that were responsible for the financial supervision of the company.

IICL is in provisional liquidation and that process must be dealt with under UK law. Companies with claims outstanding against IICL should pursue their cases with the provisional liquidators. Clarification obtained from the UK authorities indicates that private policyholders are, in principle, protected under the UK Policyholder Protection Act, subject to the policyholders meeting all of the other requirements of the UK Act, while Irish commercial policyholders are unlikely to be covered under that Act.

I appreciate the difficulties being faced by IICL policyholders. However, it would not be acceptable to burden Irish taxpayers with the inevitable cost that would be involved in meeting insurance claims, resulting from the failure of this UK company.

Question No. 114 answered with Question No. 62.